Indians are Investing in Foreign Properties More These Days! Guess, what’s the driving force?
Though
the real estate market in India is facing a slowdown, wealthy Indians are seem
to be very active in making investments in foreign properties. There is a
significant increase in the number of Indian home buyers looking for real
estate properties in California.
In today’s age, Indian buyers have more purchasing power than the past years and they are not willing to get off the sidelines because of the uncertainties in the domestic economic market. In fact, a significant number of High Net-worth Individuals (HNIs) show a high affinity towards buying homes and other real estate properties outside India.
The year 2020 is going to be a more beneficial year for Indian buyers as the estimated median home price in California will increase by 2.5% to $607,900 in 2020 when compared to 4.1% annual gain in 2019, as per California Association of Realtors forecast.
So, what factors are fuelling the increased interest of Indians in
overseas real estate?
First:
A considerable drop in the
prices of real estate properties in California is attracting more Indian
buyers. The effective discounts and currency and price movements in prime
locations of California are benefitting Indian buyers more than
ever.
Second:
The yields for both
capital and rental are higher in various locations of California as compared to
property investments in Indian market. Mature markets like California offer
higher returns, and relatively shorter building period.
Third:
Indian HNIs invest in
overseas real estate market because it provides them a hedge against the
domestic economy and market risk. This comes as an advantage for Indians in the
times when the domestic real estate market doesn’t perform well.
Fourth: Real estate investing in California properties through mutual funds, exchange-traded funds, direct
equity, and immovable property lead to portfolio diversification and act as a
barrier against negative domestic events.
Fifth:
Investors also benefit
from the depreciation in the Indian rupee during the phase of selling or
liquidating the investment.
This
is not all! There are other appealing factors as well.
Sixth:
The rules and regulations
for real estate in major global cities of the US including are more transparent
than India. The regulation system, healthcare facilities, and educational
institutions are highly evolved in the US and all of these features are synonymous
with better quality of life for Indians.
Seventh:
There are many Indians who
consider buying properties in global cities with the intent of settling in and
starting a new life. Recently introduced emigration schemes (such as EB-5 visa)
are also influencing the pattern of property investments made by Indians. A
substantial number of HNIs are moving to international locations because their
present and future generations are more likely opting to stay abroad than
previous times.
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